|Based on Income Tax Law Article 119.12 Capital Gains Tax on Domestic Source Income from Securities applies in such a case of a Japanese shareholder not residing in Korea, a domestically located firm generating income through the transfer of issued stocks
According to Article 13 of Korea-Japan Tax Agreement:
However, should those securities be acquired by a non-resident alien and added to the acquisitions and holdings of a company in a special relationship, at anytime within the tax year in which the transfer of the capital gains generated occurs, if the amount transferred amount is below a 25% ratio of total issued stocks for the domestic firm, or below 5% of the total security transfer ratio for a domestic business entity transferring capital gains, the aforementioned non-resident alien or entity is not libel for payment of taxes on income earned as a result of that transfer.
Action Taken by OFIO:
Our office informed Company C of the fact.